A proposal to ban the sale of newly built homes as leasehold instead of freehold has been brought forward. Leasehold homes are where the owner only buys the right to live in and use the property but not to own the land itself.
With the new proposal, ground rents on newly built homes will be banned. In the past these ground rents have been known to double every decade which makes the land and property almost impossible to sell, greatly effecting the home owner.
The current Leasehold system which the proposal wants to change has existed for a long time in both England and Wales, especially in Sheffield and South Yorkshire.
The trend for new-built houses being sold as leasehold has been on the rise in recent years. In 2016, 14.6% of all new-build houses were sold as leasehold properties, an increase of 143% over the last 20 years.
Mr Sajid Javid the Secretary of State for Communities and Local Government, stated that there were 1.2 million cases of houses on leasehold. He said proposals would affect future sales, and the escalating costs were an example of a “broken housing market”.
Wosskow Brown Conveyancing Solicitor, StJohn Wright, who is based at our Woodseats Office said: “This is very welcome news. Anything the Government can do to speed up the process of buying and selling houses and reducing the costs to the Consumer has to be a good thing. It is high time the Government intervened to streamline the process of conveyancing and these reforms will go some way to help everyone involved with the business of house-buying and selling.”